Former corporate superstar Adelphia Communications is winding up its last act.
It has already sold off cable networks with 5 million customers. Its ties with the founding Rigas family are long severed.
Now the company, a shell of its former self, is wrapping up a 4 1/2 -year odyssey in bankruptcy court in New York City, preparing to empty its pockets for creditors.
The end of the bankruptcy process may also end the existance of Adelphia itself -- once the nation's No. 5 cable TV seller and one of Western New York's most powerful corporate citizens.
"There's a lot of people that are working hard to get it (completed)," company spokesman Mark Spiecker said.
Dickering by creditors continues, but most have approved a reorganization plan that will pay out roughly $15 billion to banks, bondholders and suppliers. This Friday, Dec. 22, is set as the latest deadline for the plan to take effect.
After Adelphia finishes paying what it can to creditors, it can toss its name into the corporate dustbin alongside other disused brands like WorldCom and Eastern Airlines.
In Western New York, however, it's unlikely that the Adelphia name, Greek for "brother," will be forgotten anytime soon. Headquartered about 80 miles away in Coudersport, Pa., the company grew from its founding in 1952 to become a major force here, with more than 2,000 workers and 300,000 homes at the end of its cable lines.
Buffalo served as a back-up headquarters for company-wide meetings that were too big for tiny, isolated Coudersport to handle. And the founding Rigas family had a strong hand in civic life, through its donations to nonprofits here as well as its ownership of the Buffalo Sabres.
Before its crash, Adelphia's proposed operations center in downtown Buffalo became a short-lived centerpiece of economic development efforts.
Instead of building the proposed office tower, Adelphia filed bankruptcy on June 25, 2002, after trust in the company's management evaporated. Revelations that founder John Rigas had used company-backed loans to buy stock abruptly cut off his borrowing ability and led to his conviction on fraud charges in July 2004. He and son Timothy, Adelphia's former chief financial officer, are appealing the convictions.
With a reported $21.5 billion in assets, Adelphia's bankruptcy is among the 20 largest in U.S. corporate history, according to research firm BankruptcyData.Com. It was only the fifth largest in 2002, a dark year for communications companies that also saw the failure of WorldCom and Global Crossing Ltd.
With the Coudersport-based Rigas family ousted from management, Adelphia moved its headquarters to suburban Denver in 2003. Now about 170 people still work at the Greenwood Village, Colo., offices, wrapping up the company's final obligations.
Adelphia's bankruptcy wasn't the biggest, but none can claim to be more complicated, lawyers involved with the process have said.
"The capital structure of (Adelphia) is enormously complex and controversial," one bankruptcy court document asserts.
Under the hood, Adelphia wasn't a single company, but a welter of interlocking partnerships and other entities. Each one had multiple sets of creditors fighting for their share of the assets. The bevy of conflicting claims had brought the bankruptcy proceeding "to the brink of paralysis," creditors said in a court filing.
The logjam broke last spring, and in July Adelphia sold its cable operations to Comcast and Time Warner for $17.3 billion in cash and stock. The deal made Time Warner the Buffalo region's big cable provider.
The sale left Adelphia without a business but filled its coffers, providing the money to settle most of its debts. Many bank lenders will recover 100 percent of their claims, and suppliers awaiting $367 million will get some interest as well. The estimated recoveries will depend on the value of stock in Time Warner Cable, which Time Warner will sell early in 2007.
At the head of the line for repayment are "priority" claims like secured loans, followed by claims from suppliers. Bringing up the rear are bondholders, unsecured lenders and finally shareholders.
Normally, bankruptcy wipes out shareholders. But holders of Adelphia stock can continue to hold out a lingering hope of recovering some of their investment, albeit a slim one, according to the proposed exit plan.
Payment will depend on the success of a trust that will pursue legal claims resulting from Adelphia's collapse. The trust has a five-year life span that can be extended by the court. The plan warns that recoveries for shareholders "are uncertain." The stock, still listed as a "pink sheet" traded issue, was priced Friday at a penny a share.
Exit from bankruptcy will also bring a payday for chief executive William T. Schleyer. According to Adelphia's quarterly statement, he is due to receive $5.1 million upon exit, on top of $10.2 million already paid for completing the sale of Adelphia assets and $7.65 million in severance. Chief operating officer Ron Cooper, who resigned in August, already received $15.3 million in bonuses and severance.
Representatives of the creditors' committee, stockholders committee and Adelphia's financial consultant wouldn't comment last week. Some said they feared jostling the fragile deals necessary to get the approval of 30 groups of creditors.
As Adelphia's Spiecker said, "there are so many moving parts to this."
The founding Rigas family's ownership interest was wiped out previously. In a March order, the bankruptcy court formalized the family's forfeiture of its separately owned cable systems. The forfeited businesses go into the Adelphia pot to help pay debts.
The end of Adelphia's bankruptcy will set off another round of court fights, however, as bondholders seek to make up the unpaid part of their debts. Buffalo lawyer William Savino is on the legal team representing bondholders who figure they'll be out $340 million.
"We're trying to get it from (Adelphia's) underwriters and accountants," he said.